DHL is targeting the dynamic technology market, one of its five key sectors, with innovativeproducts both worldwide and in Europe offering both speed and cost-effective distribution in
response to customer demand, according to top managers.Technology firms spend about €30 billion a year on logistics and this spend is expect to grow7.7% annually up to 2015 as the sector continues to grow and expand, Rob Siegers, PresidentTechnology for DHL Customer Solutions & Innovation, told European journalists at a mediabriefing on the sidelines of a major customer event in Berlin this week.
The overall technology sector is expected to grow revenues 4-6% a year on average from 2011 to2015, but with very diverse trends and with growth driven by relatively few products such assmartphones and tablet PCs as well as by emerging markets, he explained.
The electronics components manufacturing sub-sector will more than double to revenues of €634billion with 15% average growth per year, while PCs, laptops & tablets will grow 12.6% a yearon average to €299 billion. Mobile devices will grow more moderately by 7.6% a year to €197 billiona year, and semi-conductors will grow 5.6% a year to €261 billion. Consumer electronics, however,are only expected to grow by a low 2.6% a year to €275 billion, according to figures presented byDHL.
The key supply chain trends in the technology sector are fast distribution of new products toreduce time to market, cost efficiency to reduce overall logistics costs, and simplification andcontrol in response to further manufacturing outsourcing and risks such as theft of high-valuegoods, Siegers explained. In response, DHL is offering a broad range of solutions for technologycompanies, from product launches, direct distribution and value-added services such as returns,end-to-end visibility and tracking as well as lead logistics provider concepts, he said.
DHL Express CEO Ken Allen, who is also the Deutsche Post DHL board member sponsor fortechnology, presented the Express business’ positioning and competitive advantages, stressing thatthe DHL Express wanted to provide the “fastest scheduled time-definite international serviceworldwide”. “Customers have a need for speed. Speed means reliability. But we know that the pricepoints have to be absolutely right,” he commented.
Allen also highlighted the Collect & Return service for repair of faulty technology goodssuch as laptops and smartphones, with rapid transport times via the European air hub in Leipzig. Hecited a recent case where damaged Panasonic laptops were collected from consumers, shipped to Walesfor repair and then returned to their owners.
Meanwhile, DHL Freight now offers innovative solutions for cost efficiency to reduce overalllogistics costs, and simplification and control, Rainer Schmid, DHL Freight SVP Marketing &Sales, told journalists. These include the new Door-To-More product offering multimodal air-roaddirect distribution of consolidated shipments from Asia to Europe, a new Lead Logistics Providerconcept for Europe and a single EU customs clearance offering.
The Door-To-More service, which was officially launched on Wednesday at the DHL customer event,offers benefits such as faster intercontinental distribution with reduced warehousing and stocking,he said. “Demand for this is tremendous,” he commented.
Under its Lead Logistics Provider concept, DHL Freight offers management of a company’s entireroad freight flows in Europe or potentially in other world regions, using a new in-house ITplatform to manage all the logistic service providers and achieve better productivity and costoptimisation.
At present, DHL Freight is marketing this competence to consumer electronics companies seekingto reduce their logistics costs. “A Japanese consumer electronics giant will be working exclusivelywith us in Europe,” Schmid revealed. He stressed that now was the right time to approach suchcompanies who would not have considered outsourcing key parts of their logistics activities only afew years ago. DHL targets a 15% overall cost reduction over three years, or less if customersalready have efficient freight management, he disclosed.
A third innovative product is EURACCESS, a Customs Control Tower Solution offering centralisedIT-based control of all EU customs activities. DHL Freight offers a dedicated team who manages allof a customer’s European customs activities at a local level. The key benefits are better customscompliance, full transparency and process harmonisation.
Bill Meahl, DHL Chief Commercial Officer, said DHL aimed to become the market leader in all fiveof its key sectors – life sciences & healthcare, technology, engineering & manufacturing,automotive and energy – and outlined the group’s sector management approach. He declined to saywhat proportion of overall DHL revenues these five sectors represented although they were “easilymore than 25% of our business”, while he noted that DHL’s 100 largest customers account for about20% of revenues.
He also presented several innovative solutions, including RFID for fashion shipments, electriccar battery management for Renault, and airline solutions such as the catering logistics operationat London’s Heathrow airport.
But Meahl admitted that DHL has not yet made much progress in the area of city logistics beyonda few projects and discussions with large cities around the world, even though this was expected tobe a critical future aspect of urban planning, especially for mega-cities.
“Today we do not have a lot of good examples where we provide services to urban areas,” he saidbut stressed: “It will become more and more urgent to get trucks out of cities and we want to bethere when it happens.” He criticised: “There’s still not the urgency for urban planners to takedecisions to force players to do business in a more efficient way. There are not buyers forservices yet. Cities are not prepared to make difficult calls yet.”
